Provincial Government of Marinduque v. Placer Dome, Inc.

Sep 29: In the U.S. Court of Appeals, Ninth Circuit, Case No. 07-16306. In the case, which does involve environmental issues, but is more related to international law and legal jurisdiction issues, the Ninth Circuit says, under the act of state doctrine, “the acts of foreign sovereigns taken within their own jurisdiction shall be deemed valid.” W.S. Kirkpatrick & Co. v. Environmental Tectonics Corp., 493 U.S. 400, 409 (1990). Founded on international law, the doctrine also serves as a basis for federal-question jurisdiction when the plaintiff’s complaint challenges the validity of a foreign state’s conduct.

The Appeals Court said, "We consider here whether the district court had subject-matter jurisdiction over this suit, based upon the act of state doctrine, such that removal from state to federal court was proper. Because none of the referenced conduct by the foreign sovereign -- in this case, the Philippine government -- is essential to any of the plaintiff’s causes of action, we reverse the district court’s exercise of subject-matter jurisdiction under the act of state doctrine."

The Provincial Government of Marinduque (the Province) sued Placer Dome Corporation in 2005 in Nevada state court for alleged human health, ecological, and economic damages caused by the company’s mining operations on Marinduque, an island province of the Republic of the Philippines. According to the complaint, Placer Dome severely polluted the lands and waters of Marinduque for some thirty years, caused two cataclysmic environmental disasters, poisoned the islanders by contaminating their food and water sources, and then left the province without cleaning up the mess -- all in violation of Philippine law.

Immediately after the Province filed suit, Placer Dome removed the case to federal district court for the District of Nevada on the basis of federal-question jurisdiction. Specifically, Placer Dome contended that the case “tender[ed] questions of international law and foreign relations.” The Province moved for an order requiring Placer Dome to show cause why the action should not be remanded to the state court due to a lack of subject-matter jurisdiction. The district court denied the Province’s motion, holding that federal-question jurisdiction existed under the act of state doctrine of the federal common law. Placer Dome moved to dismiss the suit for lack of personal jurisdiction and forum non conveniens. The district court granted limited discovery on personal jurisdiction. Before discovery was concluded, in March 2007, the United States Supreme Court issued Sinochem International Co. v. Malaysia International Shipping Corp., announcing that district courts have latitude to rule on the threshold issue of forum non conveniens before definitively ascertaining subject matter and personal jurisdiction. 549 U.S. 422, 432 (2007). The district court stayed jurisdictional discovery, and ordered briefing on the issue of forum non conveniens. Invoking Sinochem, the district court dismissed the matter on forum non conveniens grounds in favor of a Canadian forum.

In its final conclusion the Appeals Court said, "The Province’s complaint does not present a federal question based upon the act of state doctrine. The district court therefore lacked subject-matter jurisdiction over this suit and removal from state court was improper. We reverse, vacate the forum non conveniens dismissal, and remand with instructions to remand to the state court."

Access the complete opinion (click here).